Micro, Small and Medium Enterprises (MSMEs) in Post-COVID-19 Era

As per the Annual Report, 2018-19 of the Ministry of Micro, Small and Medium Enterprises, Government of India, there were 633.88 lakh micro, small and medium enterprises (MSMEs) in the country engaged in different economic activities. Total employment in the MSMEs sector is estimated to be 1,109 lakh, and their contribution to gross domestic product (GDP) is pegged at 28.9 percent. In the wake of COVID-19, it was a particularly challenging time for MSMEs, many of which were on the brink of closing down their operations. Sensing the gravity of the situation, Prime Minister Narendra Modi announced on May 12, 2020, the Aatmanirbhar Bharat Abhiyan (Self-reliant India Initiative) which combined relief, policy reforms and fiscal and monetary measures to help businesses and individuals cope up with the situation created by COVID-19 pandemic. A mega package of ` 20 lakh crore (10 percent of the GDP) was announced for the purpose. The details of the ` 20 lakh crore package were announced by Finance Minister Nirmala Sitharaman in five tranches during the next five consecutive days. All the measures were aimed at spurring investment and buffering the economy against the Covid pandemic shock. In a bid to make MSMEs sector of the economy survive, the Finance Minister in her first tranche of the stimulus, announced on May 13, 2020, laid out specific boosters that could offer some relief to this hard-hit sector. The nearly ` 6 lakh crore tranche, included ` 3 lakh crore collateral-free automatic loans for MSMEs. Furthermore, from July 1, 2020, a new classification of MSMEs with liberalized definitions is in place. This book provides a descriptive and analytical account of the functioning of MSMEs in India. It discusses at length their role in the Indian economy, policies and programmes of the Government to promote them, and the problems faced by them.